COMPANY MEETING

LONDON MIDLAND AND SCOTTISH RAILWAY CO.

LORD STAMP'S ADDRESS THE seventeenth annual general meeting of the London Midland and Scottish Railway Company, held at Friends House, Euston Road, London, N.W. 1, on Friday, March 15th, 1940.

The Right Honourable Lord Stamp, G.C.B., G.B.E., chairman of the company, presided.

The chairman: I will now ask the secretary to read the notice convening the meeting.

The secretary (Mr. Owen Glynne Roberts, C.B.E.) read the notice.

The chairman : Ladies and gentlemen, I now lay on the table the report and accounts for the past year, and as they have been in your hands for some days, I presume you will as usual take them as read, but before coming to the main business of the accounts there are some personal references I should like to make.

Lord Runciman, who had taken up Government office again with great public spirit, had in consequence, to resign from the Board, and we are the poorer by the absence of his mature judge- ment. With the sad loss of Mr. Booth our strength in shipping was seriously affected, but this was remedied by the appointment of Sir Thomas Brocklebank. As you know, Brocklebank is a well-known Liverpool name, and Liverpool has always been strongly represented at Euston.

In fact the Liverpool and Manchester Railway was the genesis of the L M S, and our representation at Manchester is now to suffer by the resignation of the deputy chairman, Mr. Edward Brocklehurst Fielden. One of his forbears was present 105 years ago at a meeting which resulted in the formation of the Manchester and Leeds Railway, and his family in one capacity or another have ever since been associated with that railway and its successors. In his time he has been an engineer, a cotton spinner, a farmer, a Member of Parliament, a County Councillor, a High Sheriff, and a Master of Foxhounds, but first and last a railway director and chairman of the Lancashire and Yorkshire before the amalgamation. In all his activities he has given himself whole- heartedly to the work in hand, which he has discharged with a keen sense of duty, and in all his activities he has won the admiration and affection of those with whom he has worked. He carries with him the good wishes of all in his retirement from the L M S, but if I know him aright he will fully occupy his retire- ment by work in other spheres of public duty.

The Scottish Committee has been strengthened by the appoint- ment of Sir Ian Bolton, but sadly weakened by the retirement of Mr. Murray and Mr. David Cooper. Both gave long and faithful service, and Mr. Cooper's connection with railways must surely be almost a record. For he started as a parcels clerk at the age

• of 12 in 1867 and continued in service to the railway for 72 years.

Mr. H. L. Thornhill has retired from the position of Chief Legal Adviser, and the position has been filled by Mr. Alexander Eddy, the company's solicitor.

RESULTS OF THE YEAR At our meeting a year ago, in discussing the prospects for the year, I pointed out the various international and economic factors which were adversely affecting our traffic receipts, stating that from what was then discernible, we could be a little more optimistic.

The decline in our receipts, which was so severely felt from the early spring of 1938, ceased_ about the same time iy 1939. At the end of the eleventh week the receipts were £718,000 less than in 1938, but we then turned the corner and recovered this loss with a small margin by the end of June, and in the eight remaining weeks before the outbreak of war there was an improve- ment in receipts of about £1,000,000, an improvement which, of course, included the additional receipts from carriage of coal and materials for munitions caused by the anticipations of war.

While our receipts for the first half-year showed practically no change as compared with 1938, a substantial economy in working expenditure was obtained, with the result that for the half-year we had a net increase of £637,000, and in the remaining eight weeks prior to the outbreak of war the expenditure showed only a small increase owing to the additional traffic I have mentioned, with the result that for the first eight months of the year we had an improvement in net revenue of £x,678,000.

With the outbreak of war and the Government control arrange- ments, which I shall explain later, the actual earnings of your undertaking, in isolation, lost their identity, and the net revenue accruing to the company was its share, under the Government arrange- ment, of the aggregate net revenues of the controlled railway companies together with certain non-controlled net revenues.

During these four months there was a very heavy traffic on all the railway lines; on the other hand, there were increases in rates

of wages and prices of materials, and new expenditure occasioned by working in war-time conditions which are colloquially known as " the black-out."

With these cross-currents, our share of the pool of net revenue for the last four months of the year, together with certain net revenues which are outside the control and are shown separately in the annual accounts, resulted in on increase of £1,288p00, so that for the year we had an improvement of £2,966,000, which brought us back to practically the position we were in in 1937. This enabled us to recommend the dividend on the 1923 preference stock which received nothing in 1938, and xi per cent, on the ordinary stock, carrying forward to next year £101,000. Had the improvement in our earnings to the end of August continued to the end of the year, a position we had to forecast for the purposes of the Railway Staff National Tribunal early in September, our estimated results would have been £2oo,000 better than the actual results I have given.

It is not possible for me to deal in detail with the yearly figures under the usual statutory headings, but, as part of the group of controlled railways, we are continuing and developing to the best of our ability the various arrangements which I have explained to you from time to time to secure the utmost efficiency and economy in working. In fact, with our partnership with the other railway companies and with the Government, there is a moral obligation on us to watch even more zealously than before the economy of every penny that we spend, quite apart from the obligation on everyone in this country to avoid unnecessary expenditure at the present time.

In completing our accounts we have followed our practice in providing provisions for renewals as before, and, with the rise in prices in 1939, the amount set aside for renewals was £748,000 greater than in 1938, and this, together with the reduction in the renewal expenditure for the year, resulted in the renewal funds increasing for the year by £1,389,000.

I explained to you a couple of years ago the reasons which had actuated us in spending in excess of the normal rate on re- equipment, and not only did this policy enable us in the lean years to do much re-equipment work at low prices, but it contri- buted to the physical condition of our lines and equipment at the outbreak of war being in a higher state of efficiency than at any time in our history.

I see it suggested that the results of the last four months indi- cate a partial exhaustion of operating economies, but in fact they continued throughout the year and increased payments for material purchases and labour do not reduce economies in the true sense of that word.

The way in which expenditure was held down during the pre-war part of the year resulted directly from high operating efficiency and certainly was not at the expense of it. During the summer the claim was confidently made that efficiency of working on the L M S had reached its highest point since amalgamation. I examined this claim by every available test and came to the conclusion that it was completely justified, and we have the satis- faction of knowing that this property passed into the National Service for war purposes at the highest degree of maintenance and operating efficiency it had ever attained, even if at the same time with the melancholy reflection that the early fruition of an ener- getic commercial policy was now denied us. It would be impossible for me to set out all the data upon which this conclusion was reached. I can only give a few pointers of different kinds for the pre-war period of 35 weeks which will be appreciated by different people. The loaded wagon miles run had increased by some 5 per cent. over the same period in 1938, but the freight engine hours in traffic only by about one-third of one per cent., and the coal consumption by one-sixth of one per cent. Compared with the peak year 1929 the total freight engine hours were down by 13 per cent., but the loaded wagon miles only 5 per cent. In less precise language, the time the engines are out for work was very heavily reduced compared with the work they actually did while they were out. The train miles per engine hour had improved o.8 per cent. over the previous year, and over 7 per cent. compared with 1929, but the wagon miles run for every engine hour improved by 4 per cent. over 1938 and 9.36 per cent. over 1929. Conditions of working after war broke out were, of course, quite changed, but from the outbreak of war to the end of the year we had a heavier freight traffic than ever in our history, re- presenting an increase of 35 million loaded wagon miles or 7.4 per cent. over 1929 with practically no change at all in freight train miles or total freight engine hours.

Prior to the war we were running the highest passenger mile- age in our history—ro million a year more than a few years ago. We were running daily 67 trains at over 6o miles per hour start to stop, covering 6,882 miles, against none of this class eight years before; in the interval there were 17,146 instances of acceleration, totalling 55,710 minutes daily.

Freight services showed similar accelerations over 1929. The freight assisting mileage required per too train miles was 54 per i cent. less than in 1929, and the shunting also had fallen by 6 per cent. The increase in the miles between engine casualties to which I referred last year continued to advance and was actually 67 per cent. over five years before.

Our excursion trains increased from 7,460 in 1929 to 21,850 in 1938, and facilities in all directions were at their highest. We had just completed a year with the lowest number of train mishaps in our history, and the fatal injuries to our operating staff, which had been progressively falling for some years, were in the first six months of 1939, 3o per cent. less than in 1938.